Chinese Toy Export Enterprises Face Cold Winter Puzzlement

With the growth of orders and the increase of export volume, China's toy export enterprises are gloom over such a favorable situation of "double harvest".

Exchange rate changes "eat" profits

Chenghai District, Shantou, Guangdong, is one of the largest toy manufacturing bases in China. Chenghai's Christmas gifts and toys account for more than 70% of China's exports.

There are more than 3000 related production enterprises, employing at least 100 thousand people.

At the beginning of this year, many manufacturers of Christmas gifts were pleased with the increase in orders, but now, with the delivery of orders, the number of enterprises is crying.

Xu Songhui has been engaged in the production of foreign trade for Christmas gifts for over 30 years. From the beginning of reform and opening up, he relied on "Santa Claus" to become rich, and run a small family workshop to a large factory with more than 1000 workers.

In 2010, Xu Songhui, who managed to survive the financial crisis, received $about 20000000 in Christmas orders for export volume. For this reason, he recruited more than 400 workers to work overtime to complete the production task, but Xu Songhui was foolish when he settled the foreign exchange.

"I encountered a more difficult winter than the financial crisis."

He said.

"The price of raw materials has increased by 30%, and the wages of workers have increased by 30%. It has been difficult to rush to work to complete the order to the time of foreign exchange settlement, and to catch up with the appreciation of the renminbi." eating "has lost 2% of the profits this year.

Xu Songhui said.

Xu Songhui, holding a 1.5 metre tall Santa Claus, said that the Santa Claus who sold 19 dollars in the US market was sold for 5 dollars from his factory. It was estimated that gross profit could reach 0.4 dollars, but at last it would be worth 0.45 dollars.

In the 1-8 months of this year, the export volume of China's toy industry was 5 billion 988 million US dollars, up 31.6% from the same period last year.

However, the phenomenon of "increasing production but not increasing income" has generally appeared in the toy industry.

Xue Meng, Secretary General of the toy branch of China Light Industry Arts and crafts import and Export Association, said: "the pressure of RMB appreciation will further reduce the profit margins of the toy industry.

In addition, as a labor-intensive industry, the rising labor costs and the shortage of labor force exert great pressure on enterprises.

According to a survey of 239 Chinese export enterprises, more than 60% of export enterprises believe that if the RMB exchange rate against the US dollar increases by 2% or more, it will have a negative impact on its exports.

The instability of the money market makes the export oriented enterprises face another "financial crisis".

"Three mountains" oppress the living space

The rise in raw material prices, the increase in labor costs and the fluctuation of the RMB exchange rate have become the "three mountains" on the export oriented foreign trade enterprises. Recently, a dozen or so small businesses in Chenghai have been shut down and shut down.

As the global economy improves, most enterprises say that the order in 2011 has increased than that in 2010. However, because of the unstable exchange rate, most enterprises are in a state of "single dare not accept", so as to avoid a single loss or a single outcome.

In order to retain workers and the market, enterprises have to choose "short flat fast" small list.

Xu Songhui said that the increase in raw materials and labor costs can be calculated, so it can also be gradually digested by finding alternative materials and improving mechanization. Only RMB appreciation is a fatal blow to enterprises.

For unstable monetary markets, many export enterprises have tried their best to reduce risks. Some have chosen the hedging business of banks and fixed the exchange rate ahead of schedule.

But for many small and medium profit enterprises with small profits, this undoubtedly adds new costs.

This year, Guo Shaoxi, a toy company owner, opened a branch in Jiangxi and opened dozens of processing points in more remote mountainous areas of Guangdong to attract more.

In order to minimize the impact of instability in the RMB exchange rate and fluctuations in foreign markets, many foreign trade enterprises have turned their attention to the domestic market.

Xu Songhui, who has been producing Santa Claus for more than 30 years, has begun to apply these techniques to the production of Chinese dolls: the "loose boy" with Chinese characteristics. Although it is still a small share of production, Xu Songhui hopes to gradually open the domestic market by the spring festival ornaments and walk on two legs.

Confusion in pformation and upgrading

Guo Zhuocai, President of the Chenghai Toy Association and the chairman of the Guangdong HWTOYS toy technology Limited by Share Ltd, said the international market has recovered this year, but the rise in the costs that followed has made it difficult for the "made in China" in the low end of the industrial chain to share the joy of the market recovery.

Upgrading and pformation seems to be the inevitable choice for China's foreign trade enterprises.

Xue Meng said that many toy enterprises are now struggling to maintain, but a considerable number of enterprises are relying on independent innovation, creating their own brands, increasing the added value of products and other ways to get out of the new path.

Some toy enterprises in Chenghai have begun to upgrade to the high-end of the industrial chain, constantly introducing new and multi-level products, increasing the technological content of their products, turning from single toy to toy and pet toy.

Guangdong Ao Fei animation culture Limited by Share Ltd develops the market with the mode of "animation + toys". In 2009, Austrian animation became the first animation and toy company to be listed on A shares in China.

Guangdong Ao Fei animation culture Limited by Share Ltd executive manager Yang Yusheng said.

However, upgrading and pformation is not an easy task for traditional toy companies.

On the one hand is the gradual compression of profit space and the intensification of market competition. On the other hand, it is the objective pressure to solve the problem of labor employment. The traditional labor-intensive enterprises are caught in the middle and struggling to find a way out.

Christmas gifts